Chapter 18 - Employees and the Corporation

CHAPTER 18
EMPLOYEES AND THE CORPORATION

INTRODUCTION

Employees and employers are engaged in a critical relationship affecting the corporation’s
performance. There is a basic economic aspect to their association: Employees provide labor for
the firm, and employers compensate workers for their contributions of skill and productivity. Yet,
also present in the employee-employer exchange are numerous social, ethical, legal, and public
policy issues. Attention to the rights and duties of both parties in this relationship can benefit the
firm, its workers, and society.

PREVIEW CASE

Google
Sago Mine/International Coal Group
Nike Corporation

Should employees, like this programmer, have a right to criticize their employers using their
personal blog? Is a manager justified in using an Internet search engine to find information
about employees that they, or others, have posted? Was Google justified in terminating this
employee?

Who is responsible for the deaths of these miners? What roles should government regulators,
managers, and workers and their unions play in assuring the safety and health of people on the
job?

What wages and hours are fair in this case? Should multinational companies pay their overseas
workers enough to enjoy a decent family standard of living, even if this is well above the legally
mandated wage or above wages common in the area for similar kinds of work? Should extra be
paid for overtime work, even if not required by law?

Teaching Tip: Preview Cases

The three preview examples illustrate the complexity of the
rights and duties of both employers and employees in the
modern workplace. In the first example, the employee’s right of
free speech is counterpoised to the employer’s interest in
protecting its reputation. The second example explores the
relative duties of managers, regulators, and unions in assuring a
worker’s right to a safe workplace. The final example points to
the difficulty of setting wages abroad that are both fair and in
line with the local labor market.

18-1
Chapter 18 - Employees and the Corporation

CHAPTER OUTLINE

I. THE EMPLOYMENT RELATIONSHIP

II. WORKPLACE RIGHTS

Teaching Tip:
Rights and Duties of Employers and Employees
Students may be asked to consider the brief vignettes given in
the preview examples and on pages [check pages] 353, 356, 358,
361, and 362. What rights or duties, as shown in Figure 18.1,
are illustrated by these mini-cases? Do any rights conflict? If
so, which should be given priority? (Review: priority principle,
Ch. 6)
A. The Right to Organize and Bargain Collectively

B. The Right to a Safe and Healthy Workplace

C. The Right to a Secure Job

III. PRIVACY IN THE WORKPLACE

A. Electronic Monitoring

B. Romance in the Workplace

C. Employee Drug Use and Testing

D. Alcohol Abuse at Work

E. Employee Theft and Honesty Testing

18-1
Chapter 18 - Employees and the Corporation

IV. WHISTLE-BLOWING AND FREE SPEECH IN THE WORKPLACE

Teaching Tip: Whistle-blowing

Various real corporate examples could be introduced into a class
discussion to explore factors that may cause an individual to
blow the whistle against a firm. How much harm must occur?
How much potential for harm is a sufficient motivator? How
much privacy should be given to an organization? Are internal
whistle-blowing programs -- developed by many firms --
adequate, or are they window dressing or legal protection? The
clash between an employee’s loyalty to an organization and her
or his duty to society or a corporate stakeholder is a rich area for
discussion. Instructors may wish to use clips from the movie
“The Insider,” which is a fictionalized account based on the
story of Jeffrey Wigand, who blew the whistle on tobacco
company Brown & Williamson.
V. WORKING CONDITIONS AROUND THE WORLD

Teaching Tip: Worker Safety and Health Video

Lee Hochberg reports on coal mine safety, in the wake of two

2006 West Virginia mining disasters – the explosion at the Sago

Mine, which killed 12, and the fire at the Alma Mine that killed

two. The segment includes interviews with coal miners and

their family members, the governor of West Virginia, a history

professor, and the former head of the National Mine Health and

Safety Academy. Much of the piece focuses on the role of

government regulations in ensuring safety in the mines.

* The video segment is from the Public Broadcasting Services’s “News Hour

with Jim Lehrer” and is available on the Instructor’s Resource Manual DVD

that accompanies the textbook, available upon request from the publisher.

A. Fair Labor Standards

18-1
Chapter 18 - Employees and the Corporation

VI. EMPLOYEES AS CORPORATE STAKEHOLDERS

GETTING STARTED

KEY QUESTIONS AND CHAPTER OBJECTIVES

1. Examining what rights workers have to organize unions and bargain collectively.

U.S. labor laws give most workers the right to organize unions and to bargain collectively with
their employers. Some believe that unions are poised for resurgence after many years of decline.

2. Understanding the obligations of business to protect workers, as government regulation

of employee safety and health issues increases.

Job safety and health concerns have increased as a result of rapidly changing technology in the
workplace. Employers must comply with expanding OSHA regulations and respond to the
growing trend toward violence at work.

3. Assessing whether or not employers have a duty to provide job security to their workers.

Employers’ right to discharge “at will” has been limited, and employees now have a number of
bases for suing for wrongful discharge. The expectations of both sides in the employment
relationship have been altered over time by globalization, business cycles, and other factors.

4. Investigating to what extent employees have a right to privacy, and if businesses can
legitimately monitor employee communications, police romance in the office, test for drugs
or alcohol, or subject employees to honesty tests.

Employee’s privacy rights are frequently challenged by employers’ needs to have information
about health, their work activities, and even their off-the-job life-styles. When these issues arise,
management has a responsibility to act ethically toward employees while continuing to work for
a high level of economic performance.

5. Evaluating whether or not employees have a duty to blow the whistle on corporate
misconduct, or if employees should always be loyal to their employer.

Blowing the whistle on one’s employer is often a last resort way to protest company actions
considered to be harmful to others. In recent years, legislation has extended new protections to
whistle-blowers.

18-1
Chapter 18 - Employees and the Corporation

6. Knowing the special obligations of transnational corporations to their employees around

the world.

The growing globalization of business has challenged companies to adopt fair labor standards to
ensure that their products are not manufactured under substandard, sweatshop conditions.
KEY TERMS AND CONCEPTS USED IN THE CHAPTER
drug testing, 394

electronic monitoring, 392

employee assistance programs, 396

employment-at-will, 389

ergonomics, 387

fair labor standards, 399

honesty test, 396

labor union, 386

Occupational Safety and Health Administration (OSHA), 387

privacy rights, 391

social contract, 390

sweatshops, 399

whistle-blowing, 397

18-1
Chapter 18 - Employees and the Corporation

INTERNET RESOURCES

www.ilo.org International Labour Organization (ILO)

www.drugfreeworkplace.org Institute for a Drug-Free Workplace
www.osha.gov Occupational Safety and Health Administration
www.whistleblowers.org National Whistleblowers Center
www.aclu.org American Civil Liberties Union
www.afl-cio.org American Federation of Labor-Congress of
Industrial Organizations
www.workrights.org National Workrights Institute

DISCUSSION CASE

NO SMOKING ALLOWED – ON THE JOB OR OFF

Discussion Questions

1. Should employers have the right to ban or restrict smoking by their employees at the
workplace? Why do you think so?

There are three main reasons that employers should have the right to ban or restrict
smoking at the workplace. First, secondhand smoke has been found to be a serious health
hazard. Thus, smoking in the workplace puts even nonsmokers at risk. Second, employees who
smoke are more expensive than nonsmokers are, because they have higher medical costs, are less
productive, and get sick more often. Finally, some employers are required by local or state laws
to restrict smoking at work. On the other hand, some believe that smoking should be an
individual choice, and restrictions violate personal rights. By one argument, since smoking is in
many cases caused by an addiction to nicotine, employees’ right to smoke should be protected
under the Americans with Disabilities Act (ADA).

2. Should employers have the right to ban or restrict smoking by the employees off the job
as Weyco did? Why do you think so?

The argument that employers, such as Weyco, should have the right to ban or restrict
smoking by the employees off the job is much weaker than the argument that they should have
the right to ban or restrict smoking on the job. Their smoking off the job would not jeopardize
the health of other nonsmoking employees. Because they were not smoking at work, the activity
would not detract from their working time. What employees do on their own time is normally
their own business. However, employers sometimes argue that smoking off the job still impacts
them, by leading to higher health insurance costs and more sick days.

18-1
Chapter 18 - Employees and the Corporation

3. Should the government regulate smoking at work? If so, what would be the best public
policy? Why do you think so?

The main argument for government regulation of smoking at work is to protect the health of
nonsmoking employees, customers, and others who enter the workplace. But, another argument
is the government should protect smokers against unfair discrimination. Public policies could
restrict smoking in some or all workplaces or require separately ventilated areas for smoking. It
could also prohibit discrimination against smokers.

4. Should multinational firms have a single corporate policy on smoking in the workplace,
or vary their policies depending on local laws and norms of behavior in various countries
where they do business?

The chapter discusses the dilemmas faced by multinational corporations that do business in
regions with different cultural and legal norms. In this instance, should companies have a single
standard, with respect to workplace smoking, or adapt their policies according to local cultural
standards? At the very least, companies should comply with minimum standards set by local
law. Some would argue that restrictions on smoking should be universal, because smoking is
just as dangerous in one country as another.

18-1